Dharamsala: Himachal cabinet on Thursday gave in-principal nod to participate in Financial Restructing Plan (FRP) of Government of India for restructuring HP State Electricity Board, an official statement said.

Under the scheme, 50 percent of the financial losses or short-term liabilities of state electricty board as on March 31 2012, whichever is less shall be taken by the state government, it said.

The financial losses of HPSEBL have mounted to about Rs 1,400 crore and 50 percent of the this shall be taken over by the state and the rest shall be converted into long-term loan to be met with by the State Electricty Board.

Under the FRP the Union Government will appoint a nodal bank of make the financial restructuring plan on above lines in consultation with the HPSEBL and the plan shall again be brought for approval of the state government after getting approval from the State Regulatory Commission.

Under the scheme the Union Government would provide incentive in the next three years to the tune of about Rs 500 crores on reduction of Aggregate Technical and Commercial losses beyond the target fixed under Restructured Accelerated Power Development and Reform Programme, the statement added.

In additon to this, about Rs 175 crore shall be given as grant to the state government in lieu of taking over the 50 percent of the financial losses of the board by the government of India, it said.